Stock exchange to set up SMEs fund

Stock exchange to set up SMEs fund
Published: 29 July 2014
The Zimbabwe Stock Exchange is mulling establishing a revolving facility that will be used by small to medium enterprises wishing to undertake a primary listing on the impending SMEs bourse.

Chief executive Mr Alban Chirume told the 19th edition of Mine Entra held at the Zimbabwe International Trade Fair exhibition park in Bulawayo last week that work on the SMEs bourse was underway.

"We will set up a revolving fund for SMEs to raise funding (for their initial public offering) in the spirit of the Zim-Asset," Mr Chirume said.

The ZSE is currently made up of 63 active stocks, but the majority are relatively big and well established companies as SMEs find it difficult to finance listings while stringent regulatory rules applicable to big entities would also be a nightmare to them.

Mr Chirume said SMEs intending to list on the bourse would access the financial resources they need to undertake pre-listing activities such as legal and financial advice provided by specialists.

"We are working on the revolving fund where SMEs will borrow before listing and once listed we would get back our money," he said.

Mr Chirume said that the country's premier securities exchange was now at a stage where it would ask the regulator, Securities and Exchanges Commission of Zimbabwe, to assist on listing rules.

The ZSE boss said there were a number of advantages that can be derived from having a company listed, which included access to a platform that can be used to raise funding to start or expand a business.

Further, he said in the future listed companies could use the exchange to fulfil their indigenisation and economic empowerment obligations and negotiations were ongoing with Government.

Mr Chirume also said that being listed increases a company's visibility as many within that market would know about its existence. Listings also provide instant information about a firm's value.

In addition, Mr Chirume said listed companies were more likely to find it easier to attract strategic partners needed to grow companies as investors come in the knowledge that a firm is well regulated.

He pointed out that despite the difficult economic environment prevailing in Zimbabwe, the ZSE has been one of the most liquid exchanges in terms of turnover against its total market value.

- Golden Sibanda and Tinashe Makichi I The Herald
Tags: ZSE,


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